Is a home-share arrangement on Airbnb a residential lease?

People using home-sharing arrangements such as Airbnb could be inadvertently entering into leases bound by Victorian residential tenancy law, warns Victoria University law researcher Mr Bill Swannie.

Mr Swannie, a former lawyer at Tenants Victoria, said a 2016 Supreme Court decision has serious legal consequences for home-share guests and hosts whose rights and duties may be governed by Victoria’s Residential Tenancies Act (RTA).

The Swan vs Uecker case ruled that a home-share arrangement amounted to a sublease for two tenants who offered their leased flat on Airbnb without their landlord’s consent since the agreement gave the guests ‘exclusive possession’ of the flat.

Mr Swannie says this means that anyone who offers the whole of their premises for home-sharing for even a single night - whether they are tenants or property owners – may be entering into a lease since the legal test for creating a lease is essentially the same as that for creating a sub-lease.

“Most significantly, it means that if a home-share guest refuses to leave the property on the agreed check-out day, the host would need to follow the lengthy, complex and expensive process for eviction mandated in the RTA,” he said

“This scenario has already occurred in the USA when the case of a guest who refused to leave her home-share premises was ruled to be governed by California tenancy laws.”

Court decision leaves unanswered questions

In Victoria, the Supreme Court decision has created significant uncertainty and unanswered questions for both guests and hosts.

“On one hand, the decision may protect landlords from unauthorised sub-letting, but characterising the arrangement still depends on the terms and the particular facts and circumstances around each agreement,” Mr Swannie said.

“On the other hand, the decision indicates that home-share arrangements, no matter how short, may be characterised as a lease, and this may impose unexpected obligations on host and guests.”

The Supreme Court decision remains controversial because while home-share agreements are similar to boarding arrangements, hotel rooms, or serviced apartments (since services such as cleaning are provided in addition to accommodation) they are not typically defined as leases.

This is because the host must enter the premises to provide these services, so exclusive possession is not provided.

Mr Swannie is a law lecturer and researcher in Victoria University’s College of Law and Justice, and a lawyer in the Supreme Court of Victoria. He has researched in the area of home-sharing and residential tenancies laws for several years, and had his research published in leading Australian law journals.

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